The news today is full of the collapse of the HMV store chain, though the current 'management' seem to think they can 'save' the company. What I find astonishing is their blatant attempt at what I can only call theft. Customers who, in good faith, exchanged 'coin of the Realm' for a 'Gift Voucher,' are now being told they can't exchange these for 'goods' in any of the stores.
I am no legal expert on this, but I'm pretty sure that anyone holding such a 'Gift Voucher' could argue a case in law for either the return of their money or the supply of some 'goods.' It is my understanding that a 'Gift Voucher' is legally a form of 'Promissary Note' in that it has a 'value' printed on it and a form of words setting out what it may be exchanged for. That puts it into the same league, in a more restricted way, as a Bank Note issued - say - by the Bank of England which carries the legend "I promise to pay the bearer on demand the sum of £X." The difference is that the Gift Voucher may only be exchanged for 'goods' in a branch of the issuing company's store.
Effectively, when I buy a Gift Voucher from a company, I am receiving a Bill of Exchange in which transaction they are accepting my money and agreeing to provide me with, at some future date, goods to the same value from their stock. Promissary Notes and Bills of Exchange have been around since Roman times at least and probably longer. Carrying around gold and silver coins was risky and they were heavy, so a system of 'deposits and receipts' came into being. The receipts eventually became exchangeable between traders and the system developed into the bank notes we have today. An extension of the system allowed companies to issue a "promise to pay" on a certain date in the future for goods already received - that is the Promissary Note. These could be and often are, "discounted" to a bank by the receiving company for 'cash in hand' so they get the money, less a small percentage, and the bank later collects the full amount from the payer.
The HMV Board's decision to renege on its Gift Voucher promissary notes has some serious implications for every company that sells such certificates. They've taken the customers' money, but now refuse to honour the agreement. If it isn't outright theft, it is certainly fraud.
Noon Image: 29 Jul 2015
25 minutes ago